Artist Management

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and commitment to advancing artist’s career. 
Managers perform an important function in the career of an artist in keeping it organized, productive, and moving forward. By taking on the business aspects of the career, managers allow the artist to focus on the creative side—writing and performing. The relationship between and artist and his or her manager is very much like a marriage. It’s predicated on trust and respect. For this reason, the decision by either party to enter into a working relationship must be made carefully. 
The Management Contract 
When a manager and an artist have made the decision to enter into a working relationship, the terms of their relationship will usually be set forth in a written agreement. The agreement provides an important means of protection for both the artist and the manager. 
For instance, what if the manager has worked very hard to bring an artist to the next level of success, only to be told by the artist that their relationship is over and the artist is moving on to a more “high-profile” manager? Or, what if the manager 


has become inaccessible to the artist and is directing the bulk of his energies to other artists on his roster? Is the artist stuck? These and many other matters can be covered in the agreement. It is an agreement that should never be taken lightly. The manager is committing time and energy to furthering the artist’s career, and the artist is placing their career in the manager’s hands, for possibly many years. There may be situations where the management agreement is merely verbal. Perhaps a friend or relative of the artist started working with the artist by pitching in to help advance the artist’s career. Over time, they may have taken on more and more responsibilities until they were effectively performing the full job of artist’s manager.

Perhaps an artist was introduced to a top-level manager who believed in the artist’s potential and immediately took on management of their career. This manager may feel that the strong bond between manager and artist speaks for itself and there is no need for a written contract.

Verbal agreements are much more difficult to enforce—it’s one person’s word against the other’s, so if there are problems, things are likely to get messy and expensive.

Most states have a law called the "statute of frauds." Basically they state that contracts that are not expected to be fully completed within one year must be in writing and signed by the parties.

Theoretically, as with all contracts, everything is negotiable. However, the relative bargaining strength of the parties will determine how favorable it is to one or the other. This comes down to how much the artist wants to be managed by this particular manager, and how much the manager wants to manage this artist. There are, however, several matters (which we refer to as “deal points”) that are commonly considered negotiable regardless of the “clout” of either side. Let’s take a look at them.

The Commission

The standard range for a manager’s commission is 15-20 percent of the artist’s gross income from music-related activities. The exact percentage within that range is negotiable. Take a look at the commission clause of a standard management contract. We’ll explore the three provisions listed on the left.

There may also be escalations built into the commission—it moves to a higher percentage when the artist’s income has reached a certain threshold. This creates an incentive for the manager.

The artist may wish to carve out some exclusions in its commissionable income. This would refer to artist’s income from areas of activity in which the manager is not providing services. For instance, the artist may be an established songwriter with a stable income and only needs the manager to handle his or her career as a performer. The songwriting income might be excluded—no commission taken.

The manager might be willing to allow some deductions against otherwise commissionable income. For instance, instead of taking a commission on the full advance that the artist got from a record company (to cover the costs of making the recording), the manager may allow the artist to deduct what it actually spent on these costs, and take a commission only on the remainder.

Note: There is usually no remainder, and most managers are mindful of this.

The Term

Advance the slides to explore two aspects of the term clause—option periods and escape provisions.

Management contracts typically run for a period of three to five years. the agreement into another period. This gives the manager the right to periodically decide whether to continue managing the artist.

For the manager, the more option periods, the better. Obviously, the manager wants as much time as possible to build the artist’s career and enjoy the fruits of his or her labor.

You may be wondering, what if the artist is unhappy with the manager? Can they just fire the manager and walk away from their relationship? The answer to the first part is yes—no court will force two parties to work together if they don’t want to. But, as to walking away from the relationship, this will depend on whether the contract had some escape provisions—criteria that specified levels of success that the manager had said were attainable, allowing the artist to terminate the contract if they weren’t attained.

Keep in mind that, if the artist fires the manager for reasons that aren’t covered in escape provisions, the artist must continue to pay the manager’s commission until the contract expires.

Earnings After The Term

If the artist and the manager have parted company, either because the contract has expired or they have simply called it quits for other reasons, they should have an understanding of the artist’s obligation to pay the manager’s commission on income generated from contracts “entered into or substantially negotiated during the term of their agreement”—common language in the commission clause.

Let’s look at an example: Five months before the contract between the artist and the manager expired, the manager negotiated a seven-album deal for the artist with a record company. If there was no limitation on the above language, the artist would be obligated to pay the manager’s commission on gross earnings from all seven albums. However, if the contract had given the manager the right to take a commission only on albums “recorded and released”